AUD/USD: Recovery rally stalls as China Q3 GDP slows to 6.5%
- China's third-quarter gross domestic product (GDP) growth slowed more than expected to 6.5 percent.
- September industrial production missed estimates, while the retail sales growth picked up the pace.
- The AUD has backed off from session highs but is holding above 0.71.
The recovery rally in the AUD/USD pair, which gathered pace 30 minutes ago, has stalled after a weaker-than-expected China GDP release.
The world's second-largest economy expanded at an annualized rate of 6.5 percent in the third quarter, missing the estimated figure of 6.6 percent and down from the previous quarter's growth rate of 6.7 percent.
The slowdown is likely associated with the crackdown on riskier lending and debt and the ongoing trade war with the US.
The official data showed that industrial production rose 5.8 percent year-on-year in September - well below the estimated print of 6 percent and the previous month's figure of 6.1 percent.
Meanwhile, retail sales came in at 9.2 percent, a tad higher than the estimate of 9 percent and the fixed asset investment also ticked higher to 5.4 percent.
The upbeat retail sales and fixed asset investment figure has, so far, failed to put a bid under the Aussie, which has dropped from 0.7010 to 0.7095 in response to China's weaker-than-expected GDP. The currency pair may extend the slide toward the recent lows below 0.7050 if the CNY continues to slide toward the psychological level of 7 per dollar.
Technical Levels
Resistance: 0.7160 (Oct. 17 high), 0.7205 (50-day exponential moving average + 10-month falling trendline), 0.7238 (Oct. 2 high)
Support: 0.7089 (session low), 0.7041 (previous week's low), 0.70 (psychological level)
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
